Down Payment Calculator
Work out the monthly saving that reaches a house down payment by your target date, with closing costs included and your current savings growing alongside.
20% avoids mortgage insurance; many buy with far less.
The target includes $12,000 of closing costs on top of the $80,000 down payment — the part first-time buyers most often forget to save for.
What this calculator does
Saving for a house is a goal with a number and a date, which makes it one of the few financial questions with an exact answer. This calculator works backwards from a target price to the monthly deposit that gets you there — with two corrections most versions skip: it adds closing costs to the target, and it lets your existing savings grow at the same APY instead of sitting flat.
The target is bigger than the down payment
The down payment is not the number you need on closing day. Closing costs — lender fees, title work, appraisal, prepaid taxes and insurance — run 2 to 5% of the price and are due at the same moment.
On a $400,000 house with 20% down and 3% closing costs:
- Down payment: $80,000
- Closing costs: $12,000
- Real target: $92,000
Saving $80,000 to the dollar and discovering the other $12,000 in the loan estimate is the classic first-time-buyer shortfall. The closing costs calculator itemises where that money goes.
The savings arithmetic
Two things chip away at the gap: your current savings growing, and the deposits you add. The calculator grows the existing pot at your APY, subtracts it from the target, and solves the future-value-of-annuity formula for the payment:
monthly = gap × r ÷ ((1 + r)^months − 1)With $20,000 already saved at 4% APY on a 36-month timeline, that $92,000 target needs about $1,800 a month. Interest does some of the work — the same mechanism as compound interest, just pointed at a deadline — but on short timelines the deposits dominate. Doubling the timeline roughly halves the monthly figure, which is the honest lever if the number is unaffordable.
Where the money should sit
Somewhere boring, on purpose. Down-payment money has a property most savings do not: it must exist in full on a specific day. A market dip in the month you find the right house is a risk with no compensating upside.
- Under ~5 years: high-yield savings or CDs. A CD ladder matched to the timeline locks the rate — the CD calculator prices it, and CD ladders and early withdrawal covers the structure.
- Longer, flexible timelines: a case exists for taking some market risk early and de-risking as the date approaches — but only if the date can move.
Twenty percent is a lever, not a gate
The 20% figure avoids private mortgage insurance on a conventional loan, and it is worth knowing what the alternatives actually cost rather than treating it as a requirement:
- Conventional loans go down to 3% with PMI added to the payment.
- FHA starts at 3.5% with its own insurance premiums.
- VA and USDA reach 0% for those who qualify.
A smaller down payment means buying years earlier at a higher monthly cost. That trade is sometimes right — particularly where rent is high and prices are rising — and sometimes wrong. The home affordability calculator works from income to a defensible price range, and the rent vs buy calculator tests whether the whole project makes sense on your horizon.
What this leaves out
- Price growth. The target is fixed; real markets move. On timelines past a couple of years, revisit annually or aim high deliberately.
- Rate assumptions. The APY is held constant, and savings rates float.
- Reserves. Lenders like to see months of payments left over after closing, and moving costs are real. The target here is the closing-day cheque, not the whole cost of becoming a homeowner.
- The emergency fund. Draining it to close is how a furnace failure in month two lands on a credit card — the emergency fund calculator sizes what should stay untouched, separate from the house money.
- Down payment assistance. State and local programs exist in every state, many aimed at first-time buyers, and the good ones are underused. Check before assuming the whole target is yours to save.
For a neutral walkthrough of the buying process and loan comparison, the CFPB’s Owning a Home tools are the primary US source, and HUD covers the FHA route directly.
How this is calculated
target = price × down payment % + price × closing cost % gap = target − current savings grown at APY monthly = gap × r ÷ ((1 + r)^months − 1) where r is the monthly rate equivalent to the APY
Frequently asked questions
- Do I really need 20 percent down?
- No. Twenty percent avoids private mortgage insurance on a conventional loan, but conventional loans exist down to 3 percent, FHA at 3.5, and VA and USDA loans at zero for those who qualify. The trade-off is PMI and a larger loan. Twenty is a lever, not a gate.
- What closing costs should I plan for?
- Typically 2 to 5 percent of the purchase price, due at the same moment as the down payment — lender fees, title work, appraisal, prepaid taxes and insurance. Saving a down payment to the dollar and forgetting closing costs is the classic first-time-buyer shortfall, which is why this calculator adds them to the target.
- Where should down payment money sit while I save?
- Somewhere boring. On a timeline under about five years, high-yield savings or CDs — the money must exist on closing day, and a market dip the month you find a house is a risk with no compensation. Stocks are for horizons long enough to recover from bad years.
- What if home prices rise while I save?
- The target moves, which is this calculator's main simplification. A price growing 5 percent a year raises a 20 percent down payment by 5 percent a year too. On longer timelines, revisit the number annually, or aim at a deliberately higher target price to build in headroom.
- Should I stop saving for retirement to save the down payment faster?
- Generally keep at least the employer match — it is an instant return no savings account approaches, and once missed it never comes back. Redirecting savings above the match toward the house for a few years is a defensible trade; abandoning the match is usually not.